The company is shifting its hiring strategy, filling its ranks with more undergraduates instead of focusing on M.B.A.s. It plans to hire at a ratio of 60% M.B.A.s to 40% undergraduates—with business, engineering and even history degrees—this year, compared with its prior 70%-to-30% breakdown.

Booz isn't alone in beefing up its undergraduate hiring. A number of companies in finance, consulting and consumer products are bypassing M.B.A. candidates when recruiting new employees for management-track positions.

Some companies are hiring less-experienced candidates for lower-level positions with the expectation they'll work their way up the ranks, while eliminating positions originally designated for new M.B.A.s. Other businesses are giving undergraduates the exact jobs and salaries that used to go to M.B.A.s. And still others are keeping the same number of M.B.A. spots, but if they need to expand they do so with undergraduate-degree holders, giving them lesser titles and lower salaries than an M.B.A. would have received.

Though not official company policy for most organizations, the shift does raise a question: If an M.B.A. is no longer the required entry ticket for the executive suite—or even the ground floor—is it worth getting one?

Of course, the M.B.A. does still count for something, at least in some circles. The degree can add credibility when looking to change jobs or industries, and M.B.A. programs with strong alumni networks also can provide an "in" for otherwise tough-to-enter industries like private equity and asset management. The three extra letters can mean extra earnings, too, especially at companies that have a salary range—rather than a set figure—for various positions.

Still, for students seeking jobs today, the short-term benefits of forgoing an M.B.A. may well appear appealing.

Attractive Option

The financial crisis has played a major role in shifting corporate recruiting strategy, according to schools and companies. As companies have become skittish about spending and have looked to trim costs, they have begun opting for younger employees who, in many instances, are just as talented as M.B.A graduates but willing to work for about half the salary that M.B.A.s normally earn.

ENLARGE

Stephen Webster

Most companies won't explicitly say they're changing strategy to save money, but schools say that undergraduates' lower salary expectations likely make them appealing. The expected average starting salary for new bachelor's degree hires was $42,859 for the class of 2011, according to the Graduate Management Admission Council—or about half the $85,854 figure for new M.B.A.s.

"Many firms do, for the first time, get turned on to the fact that some of these business-school undergraduates are just as [capable] as a first-year M.B.A. graduate," says Megan Houlker, director of the undergraduate center for career development at Babson College, Wellesley, Mass.

(She did note that as the economy improves, some companies may boost M.B.A. hiring.)

In addition to the financial consideration, some companies say they are shifting their focus to undergraduates because they can be easier to train, with no bad habits formed at other organizations.

Jacqueline Wilbur, executive director for master's programs at the MIT Sloan School of Management, in Cambridge, Mass., says companies have been telling her they like the "malleability" of undergraduates.

'Very Shapeable'

Mr. Alba of Booz says his company finds undergraduates to be particularly attractive because they are "very shapeable." The company still invests heavily in training, but it gets to start with a clean slate, he says.

ENLARGE

"You have the ability to take an undergraduate and really mold them into the type of employee you want them to be," says Chirag Saraiya, a principal in Chicago for Training the Street Inc., a New York-based company that conducts financial training sessions for banks and business schools.

Administrators at many M.B.A. programs are loath to say their students are being replaced by younger, less-experienced applicants, but many acknowledge that the landscape for M.B.A. jobs has changed—and not for the better.

Fewer Opportunities

Since the financial crisis, "the sheer number of M.B.A. opportunities has not returned," says Nicole Hall, president of the M.B.A. Career Services Council, Tampa, Fla., an industry group for career-services officers and recruiters. Companies "are just not hiring for the M.B.A.-level role," says Ms. Hall, who also serves as executive director of alumni and career services at Pepperdine University's Graziadio School of Business and Management in Los Angeles.

To be sure, M.B.A. recruiting has rebounded from the depths of the recession. According to a Graduate Management Admission Council survey, 57% of full-time M.B.A. students graduating in 2011 had offers by mid-March, up from 40% a year earlier.

But the undergraduate picture has improved, too, to the extent that companies are now looking at undergraduates for "what they normally would have viewed as an M.B.A. hire," says Mark Brostoff, associate dean and director of the Weston Career Center at the Olin Business School at Washington University in St. Louis.

Financial Shift

Mr. Brostoff says his undergraduates are being hired into consulting jobs at rates higher than before the recession, while M.B.A.s are still "nowhere near" pre-recession levels.

Similarly, since 2008, Mr. Brostoff says, there's been a "significant increase" in financial-services opportunities for the school's undergraduate students—a greater increase than at the M.B.A. level.

Bank of America spokeswoman Ferris Morrison declines to say whether her company is more interested in undergraduate students. She says the company "continues to be focused on hiring both undergraduate and graduate students for a variety of programs."

A Goldman spokeswoman says the company expects its hiring for the summer of 2012 to be roughly flat with the prior two years, but warns that it is still early in the recruiting cycle. Goldman declines to break out undergraduate versus M.B.A. hires.

A representative from Wells Fargo wasn't available for comment.

Undergraduates are gaining a particular edge in technical financial positions, such as sales and trading, which require sharp quantitative skills but not a big-picture strategic outlook, say schools and recruiters. They are directly replacing M.B.A.s in those jobs, according to schools and employees.

MIT's Sloan School of Management started to see a shift in recruiting for sales and trading jobs when U.S. banks stopped looking at M.B.A.s for summer internships in 2009, Ms. Wilbur says. She says the move went beyond just pulling back from active recruiting. Rather, there was "active discouragement" against inquiries or applications from M.B.A.s.

Consumer-products companies are also looking to younger candidates to fill finance and marketing jobs.

For example, Unilever PLC has returned to Babson's campus to find undergraduate candidates for its finance positions after a few years away.

Same Trajectories

More troubling for business schools: Some say the career trajectory for employees who don't return to school for an M.B.A. is increasingly the same as it is for employees with the additional degree.

Ms. Houlker, a former recruiter for Bear Stearns, says that a few years ago, investment banks would expect undergraduate hires to leave after two years, either to pursue an M.B.A. or find another job.

Now, she says, more banks are promoting analysts into associate positions. She estimates that instead of 25% of analysts being promoted, that number could now be as high as 50% at some investment banks.

Ms. Korn is a staff reporter for The Wall Street Journal in New York. She can be reached at melissa.korn@wsj.com.

Corrections & Amplifications Chirag Saraiya is a principal in Chicago for Training the Street Inc., a New York-based company that conducts financial training sessions for banks and business schools. An earlier version of this article incorrectly said he was a principal in New York and the company was based in Chicago.

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